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The first thing I'll say about my investing mantra when it comes to FTSE shares is that I always buy with a long-term view. I would define this as a period of five to ten years.
Let me explain why I decided to buy. Airtel Africa (LSE: AAF) and car dealer (LSE: AUTO) shares of my holdings.
Telecommunications in emerging markets
My decision to buy Airtel shares was primarily a growth strategy. Telecommunications in Africa is a burgeoning market and Airtel looks like a promising option to gain exposure to it.
I bought the shares more than a year ago. I admit that, on paper, my investment is down about 10%. However, as with all investments, especially long-term ones, ups and downs are part of the journey. Additionally, macroeconomic and geopolitical issues have hurt global markets, so I expected some volatility.
Speaking of geopolitical issues, this is one of the biggest risks I took into account when buying stocks. It is an ongoing problem. Due to the volatile political landscape on the continent, there is a possibility that Airtel's progress and performance could take a hit.
From a bullish perspective, as the continent prepares to move in line with more developed countries and wealth increases, I can see Airtel capitalizing and its shares rising, as well as providing me with returns.
The business has done well and has been on an upward trajectory even if its shares have not. A passive income opportunity with a 4% dividend yield has helped me justify my decision. However, I understand that dividends are never guaranteed.
Automotive giant
I remember when I was very young my dad would look through Auto Trader magazine looking for vehicles for sale. Times have moved on and so has business.
Now everything is online through their website and app. Now I see my husband looking at possible family cars and am persuading him to buy and sell his impractical sports coupe.
I bought Auto Trader stock as a blue chip stock. UK readers will understand that buying and selling cars is synonymous with branding. It has the largest market share and is used by both private sellers and traders. It makes most of its money by posting sales ads.
In the case of Auto Trader, my paper investment increased by 8% over a two-year period. I'm happy with that right now. More importantly, a 1.5% dividend yield has provided me with some passive income.
As the world continues to digitalize, Auto Trader seems future-proofed to me, at least at this time. One risk I do think about is the fact that cheaper, fee-free marketplace alternatives, like Facebook Marketplace, are gaining momentum and traction in market share and popularity. This could hurt Auto Trader in the long run. I will also be attentive to the evolution and performance on this front.
I am happy with my current position and probably won't be adding to the stock any time soon as it is quite expensive at current levels, with a price-to-earnings ratio of 28.
